CMGC Intelligence: Central Maine Enthusiast, here's your 5 min read on innovation, investment, and quality of life

May 2020 Edition

Innovation

5 Questions with Jennifer Cummings, FAME Director of Business Programs

and Christopher Roney, FAME General Counsel:

Maine Seed Capital Tax Credit Program & FAME Assistance: Capital for Entrepreneurs & Small Business During COVID-19

1. How can the Maine Seed Capital Tax Credit Program be used to assist startups and businesses and what is the general eligibility?

The Maine Seed Capital Tax Credit Program is designed to encourage equity investments in Maine businesses, directly and through individual investments and private venture capital funds. FAME may authorize state income tax credits to investors for 40% of the cash equity provided to eligible Maine businesses. Investments may be used for fixed assets, research or working capital.

2. The Maine Seed Capital Tax Credit Program has recently been expanded from $5M to $15M, what additional important changes have been made to the program?

Under newly enacted law (PL 2020, Ch. 616), tax credit authority for 2020 was expanded from $5 million dollars to $15 million for the calendar year. Having already awarded $5 million in credits on January 2, 2020, FAME now has the authority to issue up to $10 million in tax credits under the program for eligible investments made in eligible companies ON OR AFTER April 1, 2020. Investments made prior to April 1, 2020 are not eligible, and credits already issued in 2020 for investments made on or about January 2, 2020 will not be adjusted.

The new legislation made additional program changes, effective April 1, 2020:

Credits are now authorized at 40% (down from 50%) of eligible investment;
The maximum cumulative qualified investment in each company was reduced to $3.5 million dollars (down from $5 million).
There is now a limit of qualified investment in any one company in any one year of $2 million dollars.

The limits set forth in #2 and #3 above will be applied commencing with applications received on or after April 1, 2020, and will count all investments already made in companies, both cumulatively and earlier in 2020.

3. Why is this tax credit program important for startups and entrepreneurs in the fundraising process?

The Maine Seed Capital Tax Credit Program allows businesses to attract investments companies through incentivizing them with the tax credit program. Investors may be more apt to invest given the benefits of the Maine Seed Capital Tax Credit Program. Startup enterprises and entrepreneurship is a vital component to success of the economic climate in Maine.

4. What type of COVID-19 relief loan programs is FAME currently deploying?

COVID-19 Lender Insurance Program: provides commercial loan insurance of 50-75% to lenders who make loans to Maine businesses experiencing interruption or hardship due to COVID-19.

COVID-19 Interim SBA Finance Loan Program: provides FAME Direct Loans of up to $100,000 with special terms available to eligible borrowers who provide proof of commitment for SBA financing.

COVID -19 Business Direct Loan Program: provides FAME Direct Loans of up to $50,000 with special terms available to Maine-based businesses experiencing interruption or hardship due to COVID-19.

5. You’ll be presenting at CMGC’s Tech Talk for May’s virtual Central Maine Tech Night. Can you give us a preview of what you’ll be discussing?

We will provide an in-depth look at the qualifications and benefits for the Maine Seed Capital Tax Credit Program and will discuss our current programs offered due to the COVID-19 pandemic, including: COVID-19 Lender Insurance Program,

COVID-19 Interim SB A Finance Loan Program, and COVID -19 Business Direct Loan Program.

Links will be available on the Tech Night web page following the presentation .

Sponsored by People's United Bank

Central Maine Tech Night (CMTN) Goes Virtual!

Don't Miss May's Zoom

Central Maine Tech Night (5/14 @ 5 p.m.)

Maine Seed Capital Tax Credit Program & FAME Assistance:

Capital for Entrepreneurs & Small Business During COVID-19

With expanded tax credit authority for 2020 to key loan programs that are available to Maine businesses and individuals/employees affected by COVID-19, in this live virtual presentation, Jennifer Cummings, FAME Director of Business Programs and Christopher Roney, FAME General Counsel, will provide an overview of which programs fit your needs and explain why Maine’s Seed Tax Credit Program couldn’t have come at a better time for Maine’s startup community.

Click here for details.

About FAME

To meet the financing needs of Maine’s business community, FAME offers a wide array of business assistance programs, ranging from traditional loan insurance programs for both small and larger businesses, to investment tax credits. FAME has also established taxable and tax-exempt bond financing programs that allow strong, creditworthy firms in Maine to access capital at favorable rates and terms.

Update on CMGC's CMNT

Following the social distancing recommendations of the Maine CDC and Governor Mills' administration, CMGC is changing the format of Tech Night to a virtual Zoom platform. Links to the Zoom presentations will be available on the Tech Night web page .

In the meantime, we have uploaded broadcasts of previous Central Maine Tech Nights - visit the Tech Night web page to browse. A selection of our most recent Tech Talks follows:

Business relief offered through SBA

during COVID-19

In this recorded Zoom workshop, Maine SBA District Director Amy Bassett provided an analysis of which SBA programs offer benefits that fit small business needs and shared actionable advice on how to apply . Click here to view.

Skincare + Lobster: How a skin-soothing protein in lobster was discovered and commercialized

Maine startup skincare brand Marin is bringing to market the research discoveries of Lobster Unlimited (UMaine). Watch for: tips on how to commercialize innovations and for great before-and-after stories of consumers with eczema.

Tech + Recreation: How Back40 utilizes tech to facilitate access to the great outdoors

Current Greenlight Maine competitor Back40 built an online gear rental site to help Mainers and tourists easily access our state's natural beauty. Watch for: tips on finding the best distribution channel for your target audience.

More Than Code: Building the Strict Chef App

When the product you need doesn't exist, developing the solution involves much more than learning code - it's all about customer discovery and market research . Watch for: tips on making an app into a business and for exploring an easier way to find recipes that fit your dietary restrictions.

Small Business Know-How:

Protecting Your Business from the Growing Cyber Threat of Business E-mail Compromise

By People's United Bank

As the use of technology in banking increases, risks associated with cyber security also increase. Companies must become well-informed of these threats so that they can take actions to minimize the risk such scams pose to their businesses' operations, customers, and overall reputations. In this issue , learn how to minimize the threat of business e-mail compromise (BCE).

Business Investment

Sponsored by Coldwell Banker Plourde Real Estate

Business Resources during COVID-19:

The Families First Coronavirus Response Act (passed March 18, 2020), the Coronavirus Aid, Relief, and Economic Security Act ( CARES Act , passed March 27, 2020), new SBA finance products , and IRS tax policy changes offer much-needed relief to small and medium-sized businesses.

Working Capital Loans

Maine businesses and private non-profits are eligible for the Small Business Administration's Economic Injury Disaster Loans program . CMGC is ready to help prepare your application for the loan, whose features include:

Up to $2M maximum
30-year term
3.75 rate (business) or 2.75 rate (non-profit)
May be used to pay fixed debts, payroll, accounts payable, and other bills
NEW: the CARES Act adds a grant of up to $10,000 as an advance on your Economic Injury loan application
NEW: for non-disaster SBA loans, payments will be covered for 6 months through the Small Business Debt Relief Program of the CARES Act.

Forgivable Loans

Through the Paycheck Protection Program (PPP) of the CARES Act, employers who apply for an SBA 7(a) loan to maintain payroll are eligible for loan forgiveness for an amount up to 8 weeks of payroll expenses.

Up to $10M maximum
10-year term
4% interest (on non-forgivable amount)
No loan fees
Excludes compensation in excess of $100k
Retroactive to February 15, 2020 to facilitate re-hire of laid-off employees

Tax Payment Extension

The IRS has issued an extension of up to $10M in federal corporate income tax payment, or up to $1M in federal individual and/or non-corporate income tax payment, may be delayed until July 15. However, taxes must still be filed by April 15. For this and additional finance-related resources for your COVID-19 response, visit Wipfli's online resource center .

The State of Maine has followed suit with an extension of the state income tax payment deadline until July 15, 2020. Taxes must still be filed by April 15.

Paid Sick/Family Medical Leave Tax Credits

Under the Families First Coronavirus Response Act (passed March 18, 2020), companies with fewer than 500 employees will be refunded a certain amount of the wages paid to eligible employees on sick or family medical leave over a 2-week period. Eligible reasons for leave include:

Experiencing symptoms of COVID-19 or caring for someone who is
Advised by healthcare practitioner to self-quarantine or caring for a quarantined individual
Subject to a local, state, or federal quarantine or isolation order
Caring for children because their school or childcare has closed due to COVID-19 precautions

The refund will be in the form of tax credits applied against the employer's FICA and Medicare tax liability. The maximum refund is $5,110 per eligible employee. Self-employed taxpayers may be eligible for a tax credit of up to $200/day. Note: this synopsis summarizes excerpts from this Wipfli article .

Employee Retention Tax Credit

Businesses with under 100 employees, businesses which had to fully or partially shut down operations, or businesses whose gross receipts declined by more than 50% compared to last year, are eligible for a maximum tax credit of 50% of up to $10,000 in eligible wages.

Please note that these resources and synopses reflect the most updated information at time of publication, and the accuracy of the information may change. CMGC recommends that you enlist the advise of financial and legal advisors when analyzing this information.

Top Stories of April 2020

Waterville's Lockwood Hotel is on track for fall opening despite coronavirus pandemic. Construction is expected to be complete by October. Strict safety protocols have been implemented by Associated General Contractors of Maine to protect the 45 construction personnel on the project.

Downtown Waterville businesses awarded grants to upgrade building facades. Ten businesses have been chosen as the grantees for the Central Maine Growth Council's Facade and Building Improvement Grant Program. Work on the store fronts along Main, Silver and Water streets is set to begin this spring and fall.

Colby College food service works with Alfond Youth & Community Center to distribute meals to those in need. - With the help of local volunteers, the AYCC provides 800-1,000 meals daily. Meals are available to community members arriving at pickup time.

Waterville nonprofit's business refurbishing computers staggered by pandemic. The organization - Give IT. Get IT. - collects computers, electronics from businesses, recycles materials and refurbishes machines for community agencies and others.

See full listing

Contact : Don Plourde

207-660-4000 dplourde@cbplourde.com

Central Maine Real Estate Spotlight

By Coldwell Banker Plourde

Real Estate

Commercial Retail Space in Visible Downtown Location:

257 Main Street, Waterville, ME

Building Size: 2,491 sq.ft.

Property Type: Commercial - Street Retail

Sale Price: $295,000

Property Features:

15 paved parking spaces
171 foot lot frontage
Vinyl siding
High traffic area

Context:

Municipal water, sewer
Close to I-95 exit

Workforce Investment

Sponsored by K ennebec Valley Community College

Employer Resources for COVID-19

Unemployment Insurance (UI)

Governor Mills' emergency legislation extends UI eligibility requirements to cover additional situations, including the temporary closure of all or parts of a business's operations, or the quarantining of an employee who intends to return to work once the quarantine is over. In addition, employees who are temporarily laid off (or "furloughed with intent to re-hire") will not be expected to look for other work, and the one-week wait period will be waived. Please note that the fundamental qualifications for eligibility have not changed; visit Maine Dept. Labor's Bureau of Unemployment Compensation website and their UI FAQs for details.

Expansion of Family Medical Leave Act (FMLA)

Under the Families First Coronavirus Response Act, employees who are caregivers of children under the age of 18 are granted 12 weeks of FMLA if they have to remain at home to care for children whose school or childcare has closed due to COVID-19 precautions. While only weeks 3-12 are paid (maximum $200 per day, or $10,000 in aggregate), these employees may be eligible for emergency paid family medical leave, which provides for two weeks of paid leave. Even employees of companies with fewer than 50 employees are eligible for this benefit, although companies of this size may be exempt if paying for this benefit would endanger a company's ability to be a going concern.

Workforce Training & Professional Development:

Expedited Online and Hybrid Training in Response to COVID-19

By Kennebec Valley Community College (KVCC)

Workforce training has not stopped at Kennebec Valley Community College. With the signing of Executive Order 25 FY19/20 by Governor Mills in March, KVCC and the Maine Community College System has been responsive to the training needs in the healthcare industry in Maine by setting up online and hybrid training programs with less restrictive access to Maine Quality Center (MCQ) funds. KVCC will be offering CNA, EMT and Advanced EMT training programs starting in late May. KVCC's Workforce Training and Professional Development will continue delivering a summer schedule which includes BLS Healthcare Provider CPR, Ductless Mini-Split Heat Pump, National Electrical Code Upate and other great training programs. Maine Quality Center funding can also provide training grants to Maine employers interested in hiring new employees or training their current workforce.

If you're an employer with training needs let KVCC be your training partner, please call Elizabeth Fortin, Dean of Workforce Development to discuss.

KVCC is eager to ensure that the businesses of mid-Maine are best positioned to jump start our local economy as soon as possible.

For more information on our professional development offerings visit us at www.kvcc.me.edu/workforce .

Call 207-453-5858 or click here

Quality of Place